Ezra Klein: Baucus' $140 Billion Tax

[flpoljunkie]

The $140 Billion Tax

James Kwak is gets this exactly right:

One reason the Baucus bill is “cheaper” than the House bill is that it has lower subsidies. For illustration, let’s assume that the whole $140 billion difference is due to lower subsidies. Relative to the House bill, then, the Baucus bill costs the government $140 billion less; but it costs middle-income people exactly $140 billion more, since they have to buy health insurance. The difference is that in the House bill, the money comes from taxes on the very rich; in the Baucus bill, it comes out of the pockets of the middle-class people who are getting smaller subsidies. Put another way, the Baucus bill is the House bill, plus a $140 billion tax on people making around $40-80,000 per year. That’ s not only stupid policy; it’s stupid politics.

By Ezra Klein | September 17, 2009; 9:38 AM ET

http://voices.washingtonpost.com/ezra-klein/2009/09/the_140_billion_tax.html